The Somali capital Mogadishu suffered some of the heaviest bombardment in nine days of fighting yesterday, as Ethiopian tanks supporting the interim government shelled new areas of the city despite a claim by the Somali prime minister to have routed Islamist insurgents.

The Ethiopian assault has killed several hundred people, many of them civilians harmed by indiscriminate shelling that has destroyed homes and shops, and forced tens of thousands to flee the city as it spread to previously relatively peaceful parts of Mogadishu. Corpses lie scattered on the streets because it is too dangerous to collect them.

More than 1,000 people were killed in an earlier round of fighting last month. More than a third of the civilian population - some 340,000 people - have fled in the past three months.

The UN humanitarian affairs chief, Sir John Holmes, yesterday accused all those involved of war crimes.

"The rules of humanitarian law are being flouted by all sides ... all factions are equally guilty of indiscriminate violence in a civilian area," he said. "Civilians in Mogadishu are paying an intolerable price for the absence of political progress and dialogue and the failure of all parties to abide by the rules of warfare."

Refugees are camped on the outskirts of the city, with water, food and medicine growing scarcer. About 600 have died of cholera and other diseases.

"At least half the capital is deserted, slowly turning it into a ghost city," the UN refugee agency said.

The interim Somali government said the 20,000-strong Ethiopian force fighting on its behalf, with 5,000 Somali troops playing a lesser role, will keep up the offensive until fighters with the Council of Islamic Courts are defeated. The council ruled Mogadishu and much of southern Somalia for six months last year until overthrown by the Ethiopian army with US backing.

Somalia's prime minister, Ali Mohamed Gedi, yesterday claimed to have defeated the Islamist forces. "We have won the fighting against the insurgents," he told Associated Press. "Most of the fighting in Mogadishu is now over. The government has captured a lot of territory where the insurgents were."

But critics say Somalia has become a battleground for Ethiopia's foreign agenda and Washington's "war on terror" that will do little to bring long term stability.

The Islamic Courts government was popular in Mogadishu after bringing relative order and driving out clan warlords responsible for 16 years of death and mayhem. But the US believed it looked too much like the Taliban, with its ban on music and dancing and the qat narcotic, and that it was sympathetic to al-Qaida.

Washington encouraged the Ethiopian military - at the "invitation" of Somalia's interim national government which was so unpopular it was unable to remain in Mogadishu - to invade and oust the Islamic Courts administration. The new Somali government includes some of the warlords who previously caused so much destruction.

A report by the Royal Institute of International Affairs said that US and Ethiopian strategic interests in supporting a weak and factionalised government that is far less popular than the Islamic Courts administration are an obstacle, not a contribution, to rebuilding Somalia.

"In an uncomfortably familiar pattern, genuine multilateral concern to support the reconstruction and rehabilitation of Somalia has been hijacked by unilateral actors - especially Ethiopia and the United States," it said.

As always in Somalia, the conflict is also being driven by money through weapons smuggling and business interests.

Ethiopian forces were to have been replaced by African Union peacekeepers, but only 1,200 of the AU's promised 8,000 troops have arrived in Somalia.